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List Of Credit Card Foreign Currency Transaction Fees

Published 3/8/08 (Modified 6/24/11)
By MoneyBlueBook

Not too long ago I went on vacation in East Asia. While I was there I had the fortune to be accompanied by local friends who could spot me so I didn't need to convert my American dollars into local currency. However there were at least two occasions when I glanced upon several beautiful small wooden art pieces that I wanted to buy. While I had a few local currency bills on me, it wasn't enough to buy the slightly expensive art pieces. So I had to resort to what I ordinarily would do back home in the United States - pull out my trusty cash back credit card. Fortunately, I had the foresight prior to traveling to another country, to research and familiarize myself with credit card foreign currency exchange fees.

While foreign currency exchange fees are now generally listed and disclosed by credit card companies, card issuers rarely publicize these hidden charges, preferring to leave them in the fine print. While some complain that the majority of these interchange fees are not used to process the actual currency exchange, but rather used to fund credit card reward programs and other direct advertising campaigns, the real concern is the lack of education when it comes to incurring these fees. Frequently, consumers who use their credit cards overseas come home to the unwelcome surprise of costly fees on their billing statement.

The foreign currency transaction fee for credit card purchases is comprised of two parts - the fee percentage charged by the card payment network (such as Visa, Master Card, Discover, American Express) and the fee percentage added by the card issuer (such as Citibank, Chase, Bank of America). Visa and MasterCard impose a standard 1% fee on all foreign currency charges to cover the expense of converting your foreign currency purchases back into U.S. dollars. The fee is imposed on the card issuer, but the expense is usually passed onto the consumer. Banks and card issuers that issue Visa and Mastercard also tack on their own additional transaction fee to the total - usually another 2%.

American Express does not have an extra card issuer fee, but it does impose its own foreign currency conversion charge of 2%. Previously, Discover Card was the only major card payment network that levied no foreign purchase transaction fees, however they have now updated their policy and tacked on the nearly ubiquitous charges. But then I challenge you to find a place overseas that actually accepts Discover Card. I think those living abroad probably have never heard of Discover before, likely thinking it's some off shoot of Visa or Master Card.

Credit Card Issuers That Have No Foreign Currency Transaction Fees

Capital One credit card is one of two major issuers that charges no foreign currency transaction fee for credit card purchases made abroad. While Visa and Mastercard still levy fees on Capital One - the card issuer has made the conscientious decision to waive the fees as a cost of attracting customers. Thus it looks like your best foreign purchase bet would be to apply for a Capital One Visa Or Mastercard to avoid the expensive and cumulative currency exchange transaction fees. I personally have the Capital One No Hassle Miles Card, which I use to earn 1.25 miles on each dollar spent, good for any airline with no seating restrictions, mileage cap, or expiration date on miles earned.

Today, most of these foreign transaction fees are laid out in more readable form on your monthly credit card statement. Sometimes they are denoted by a simple asterisk indicating the fee percentage that was levied, while some card issuers will list the actual dollar amount of the transaction fee portion. The transaction fees I've provided below include the total combined charges imposed by both the card issuer and the card payment network. Pay attention to some of the hidden special offers out there, especially the ones from more obscure credit unions and brokerage/banks.

Credit Card Issuer/Offer

Fee For Foreign Currency Transactions

Capital One

0%

Affinity Federal Credit Union

1%

NASA Federal Credit Union

1%

SunTrust Bank

1%

Discover Card

2% - Not Generally Accepted Overseas

U.S. Bank

2%

American Express

2.7% - Not Generally Accepted Overseas

Bank of America

3%

BB&T Bank

3%

Chase/Washington Mutual

3%

Citibank (Citi Card)

3%

HSBC

3%

TD Bank

3%

Wells Fargo

3%

Reminder Before Using Your Credit Card To Make Foreign Purchases

Modern credit card programs today implement sophisticated transaction software to detect fraudulent and unauthorized credit card activity. If your card has always been used in the New York tri-state region for example, but suddenly credit charges start streaming in from some place like Thailand or Indonesia, your card issuer may raise an eyebrow and start declining those international charges as part of their anti-fraud measures. A quick e-mail or phone call to your credit card company before you travel should prevent such an inconvenience from happening.

Credit Card Users Who Have Made Credit Purchases Abroad May Be Entitled To A Cash Settlement

If you made a foreign transaction using your Visa, Mastercard, or Diner's Club credit card at least once between February 1, 1996 and November 8, 2006, you may be entitled to claim money from a legal settlement. In response to an anti-trust class action lawsuit brought against Visa, Mastercard, and Diner's Club for alleged fraud and conspiracy to fix and conceal foreign currency transaction fees on credit card purchases to the detriment of card issuers and consumers, a legal settlement has been worked out. Under the settlement terms of In re Currency Conversion Fee Antitrust Litigation (MDL 1409), those who fall under the plaintiff class have three ways to participate and claim their settlement money.

While two of the options require that you gather your billing statements and receipts to verify the estimated value of your foreign credit card purchases, the simplest method for most is to file for the Easy Refund option, which is the route I personally took. As noted, this option is recommended if you traveled outside of the U.S. for less than one week or had foreign transactions of less than $2,500 using your eligible cards during the 1996 to 2006 period.

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And there is one other thing: Use a small, community or regional bank and get known. Stay out of the Chases, run from Citibank folks and the other big guys when it comes to getting fees waived because your local branch manager usually has NO power to do anything but make money for his or her bank if it's a big name place!

It is amazing how many fees will go away or never even show in the first place when the banker you deal with knows you and has the authority to waive those fees. We got over $85 back from ATM and conversion fees on our last trip to UK and Ireland and was not by accident ---it was by planning ahead.

Oh and don't be afraid to ASK if you can get a fee waiver before you or anyone travels. If the answer is NO then shop for a better bank deal and one where the person you talk to across the teller's counter or desk in the boutique banks like we use has the authority to work with you --- not just hit you with a fee! Do not be shy! Remember it IS your money!

Bryan W says:August 21, 2010 at 1:34 pm

I just got back from Eastern Europe (Denmark, Russia, Estonia, Finland, and Sweeden) and had no trouble with American Express. It was accepted almost everywhere (even in a taxi in Finland).

Everyone is hung up on the fees, but here's what I noticed for Sweeden.

While I was there, Forex gave about 6.9 Krone to $1 US plus a transaction fee. (Buy rate was about 7.7)

Amex, about split the difference, and gave about 7.33 to $1 US, which nets to right about 7.

Net, net - with the AMEX 2.7% fee, I was ahead vs. using cash / Forex, plus I'll get 3% back on most of the transactions since it was travel (Costco awards).

Kevin says:August 24, 2010 at 6:34 pm

Thanks for the insight. Looks like the PenFed Amex with no foreign transaction fees is my best bet now.

David says:September 20, 2010 at 2:29 pm

Just to let everyone know..the Schwab Visa and First Invest (ATM card with NO fees) will be discontinued as of September 30th 2010. The accounts will be taken over by FIA Card Services.......guess what fees they will start!!!

Kevin says:September 21, 2010 at 9:09 am

Thanks for the information about the Schwab Visa and ATM card. Pretty much saw it coming when they stopped taking new applications for the First Invest card. Pentagon Federal Credit Union (PENFED) has Premier Travel Rewards Amex that has Zero foreign transaction fees. It costs $50 a year but the annual fee is waived for the first year. They also have the Promise Visa with no foreign currency transaction fees and no annual fee. I have moved away from using large banks and financial service firms. They offer good deals initially to draw you in and then later change the terms. This is a consistent pattern, now Schwab has joined the crew also.

You do not have to be former military like myself to join PENFED. You only have to pay a one time fee of $20 to join the National Military Family Association.
It is a worthy contribution on it's own merits anyway. Stay with credit unions and small community banks and you will have a consistently favorable and personal relationship. Especially in regards to reduced fees.

Kevin says:September 22, 2010 at 10:57 am

Ted,

I have a house on the Northeast side of Indianapolis in Carmel. I have been using Forum Credit Union lately for business in Indy. I use the Carmel and Broadripple branches. Unfortunately I have to use banks alot and try to use credit unions (Vystar in north Florida and Forum in Indy). I would be interested to know which Old National Bank branches you use and contacts there who will refund those overseas ATM fees:).

Do you use a self directed online broker for investments? I only ask because I am looking to drop Schwab now, especially in lieu of their recent credit card and ATM actions.

Trudie says:October 4, 2010 at 5:54 am

Very interesting discussion thread.

Myself (Kiwi) and my partner (French Tahitian) have been travelling for the last 18 months. Despite extensive research I could not find a solution that would:
1. provide us reasonably priced access to cash while travelling and
2. provide us reasonably priced credit card services

Debit cards seemed an option but as we've travelled through 4 different contenients (and are still travelling) it wasn't really workable as we'd need to have too many different debit cards - and the expiration dates are not helpful. Travellers cheques etc have the same issues and are less secure.

Credit cards - as per most of the comments above - are an unnecessarily expensive way to purchase (and the fees seem exorbitant).

Wire transfers are expensive and in many of the countries we visited risky in terms of actually retrieving your money. Not only is corruption a real issue but a foriegner walking out of these places is a neon light target.

Paypal etc you need a local bank account to recieve into.

Setting up bank accounts in each country is not an option - and would be very time consuming even if it were possible.

The brokerage firm concept is interesting and one which I need to investigate again. Previously I found that interest rates on funds in the account before / after transactions weren't competitive, but maybe there are better options available now.

Travelling with cash, well, no more needs be said...!

It seems to me that there is a real lack of a cohesive, customer centric safe financial solution for travellers - that is also genuinly global. This is an issue that affects a significant percentage of the population (read "big market"...) But it's not just travellers. Now - with globalisation - it's affects anyone who makes an online purchase. Or even goes down the road and purchases from the shop on the corner. Only to find out - unfortunately at the 'recieve the credit card statement and go WHAT THE??? stage...' that the corporate structure of that organisation means that you just made an international purchase. With fees.

The reality is that corporations as we knew them even 10 years ago are no longer so. Corporations will base where they can be most efficient and where they can maximise taxation / trading opportunities. They will buy where they can be most cost effecient. And they will sell where ever they can. The associated cost structure is shifting from the corporation to the consumer (and to be fair - so are many of the price benefits).

I'm not commenting on the morality / philosphy behind that, only observing that it seems to be so. And as more comanies see the opportunities in basing themselves offshore while still selling onshore this issue will become even more widespread, affecting more consumers more of the time.

Here's an opportunity for smart players in the marke to meet the needs of a very frustrated market. There is a groundswell of dissatisfied consumers with no real (as I can see) current solutions. Be the one to provide an appropiate solution to this market and reap the rewards.

Kevin forgive my slow reply (been a BUSY month and haven't checked in)! I'd be glad to help, how do I get hold of you? I can tell you Mollie at the downtown Indianapolis main Old is the best banker out there and tell her Ted & Ivan sent you. I can't swear you will get the attention we do (nobody can give that much to everybody!) but ask and see what they can do for you!
As far as brokers I use Edward Jones off Binford Blvd. just in from 465. The broker is Michael Wright and he is likewise super! I do not believe in online brokers as I find they are too impersonal (I self direct but want a REAL voice to talk to!) and I also dislike the online brokers' lack of ability to correct a mistake if one is made (they did that to me ages ago) and most of the online brokers and many of the bricks & mortar ones cannot do foreign stocks and much of my portfolio is UK and Canadian shares (not ADRs) and they can't deal in them or hold them.

Calgary Canuck says:October 5, 2010 at 8:52 pm

I just called my bank (in Canada) TD Canada Trust to determine what their fees were and what the credit card fees were, and they confirmed the following (at least for TD Canada Trust Visa Cards):

I didn't read the rest of the comments, but I wanted to point out that here in argentina, AmEx is as widely if not more widely accepted than visa/mastercard

Chris says:October 12, 2010 at 10:59 am

The Schwab Visa was discontinued and taken over by FIA Card Services as of Oct 1 2011, but I can still use the same card. FIA confirmed there is no foreign transaction fee for me (Visa Signature).

Manitoban says:October 26, 2010 at 3:49 am

After reading several comments about currency conversion fees here, it reminded me of a recent story of how Google Inc. avoids US taxes (billions) by moving profits to foreign countries. It now seems plausible this business practice may be affecting credit card customers who shop with online retailers when they incur a conversion fee without even knowing until the monthly statement arrives. If your curious about this practice, you can "Google" (haha) the phrases "Double Irish" and "Dutch Sandwich"

My current issue with a credit card company is to do with the actual currency conversion rates they use. Although, I'm not happy with 2.5% fee I must pay to convert. MC says they convert the foreign currency amount to my home country currency on the day that the Merchant Posts or Batches their transactions.

Well, how the heck do I know when the Merchant is going to Post my transaction and what the exchange rate will be on that particular day? I know what the exchange rate is the day I make my transaction. Lately, there have been large fluctuations in exchange rates with China and the US currency battle going on.

It seems there is potential for CC companies to abuse this process and charge customers whatever daily exchange rate near the transaction date to make them the most profit. This Posting date process leaves the customer blind to how much their purchase is actually going to cost. This process needs to be regulated to protect the consumer in my opinion.

askmrlee says:October 31, 2010 at 3:18 am

@manitoban It it not the credit card network you should worry about shafting you on rates.

My experience with Capital One and Fidelity Rewards Amex (FIA Card Services) is that their rates were the pretty much the same as the mid-market rate at xe.com on that day.

Sam Van Fleet says:November 1, 2010 at 1:43 pm

Does anyone know if Capitol One charges a fee for cash withdrawals from an ATM? (ie, not purchases, but simple cash withdrawals).

Thanks!

askmrlee says:November 21, 2010 at 6:29 am

@Sam Van Fleet. Do you mean Capitol One the credit card or Capitol One Bank? Capitol One credit cards will charge you a cash advance fee for any ATM withdrawal, but no separate foreign exchange fee. Capitol One Bank will now charge $2 for the ATM withdrawal according to this report:

which states that free ATM usage ended on August 14, 2010. I cannot confirm this.

Alan says:November 26, 2010 at 3:16 am

In the UK, the 'Post Office' issues credit cards with 0% commission on purchases overseas. Does this mean they don't charge fees for foreign transactions, same as CapitalOne cards in the US?

Alex says:November 26, 2010 at 11:00 am

Just received a message from Amex & Capital One Card. They are now tacking on 2% for foreign currency transactions ;-(((

Ted fleischaker says:November 26, 2010 at 9:06 pm

How did you receive these messages? I have heard no such from Capital One. Amex has done this for years so that's not news, sorry.

dah Ithaca says:January 15, 2011 at 6:35 pm

I asked the following question of American Express:
"Please tell me the foreign exchange fee for the Platinum Delta SkyMiles card. Is it the same as for the Premier Rewards Gold card?"
The answer was:
"American Express charges a 2.7% Foreign Transaction Fee for converting foreign currency.

When international charges are converted to US dollars, the conversion rate used is no greater than the highest official conversion rate published by a government agency or the highest Interbank conversion rate given by customary banking sources on the conversion date or the prior business day, in each case increased by 2.7%.

The Foreign Transaction Fee charged on all American Express cards is same."

How does that "highest official conversion rate published by a government agency or the highest Interbank conversion rate given by customary banking sources on the conversion date or the prior business day," compare with the rate I would get in an ATM machine?

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This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.

Disclaimer: Because rates and offers from advertisers shown on this website change frequently, please visit referenced sites for current
information. This website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.